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Steve,
I would only caution you that the H & S should normally be more
compacted. In this example it sprawls over a large range of the
chart. I've found the "tighter" the pattern the more reliable
it is. The key here is: As we make new lows (and I think that
going to happen), will the RSI complete some kind of divergence?
If the RSI penetrates it's most recent low of "low thirty
something", then there is no telling the bottom of this market.
If the RSI can start to pull up short of this recent bottom, and
the market makes new lows, it's time to go "bottom fishing".
Steve Karnish
CCT
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> From: Steve Gochuico <stevego@xxxxxxxxxxxxxxx>
> To: metastock@xxxxxxxxxxxxx
> Subject: The fall of 7400 is near
> Date: Monday, October 05, 1998 1:31 AM
>
> I plotted a RSI(14) on the weekly chart of the Dow. I
> see that the RSI indicator has already completed a
> head and shoulders formation and its neckline has
> already been broken. Plus, the trendline which extends
> back to 1996 has also been broken. I beleive that the
> fall of 7400 support is near. Any thoughts?
>
> Steve Gochuico
>
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